Checkable deposits consist of any demand deposit account against which checks or drafts of any kind may be written. Checkable deposit accounts include checking, savings and money market accounts. They also include any kind of negotiable draft, such as a negotiable order of withdrawal (NOW) or Super Now account.
Checkable deposit accounts are the most liquid account a consumer can open. Standard checkable deposit accounts are used for managing daily expenses and offer immediate access to cash. Checkable deposits have check writing or draft capabilities. Innovative technologies are also increasing the money transfer and transaction capabilities for checkable accounts providing for faster settlement and instant peer-to-peer transfers.
Personal banking institutions are the primary source for checkable deposit accounts. Standard personal checking and savings deposit accounts typically do not pay interest and often require investors to pay monthly fees for the safekeeping of their assets. As investors increasingly accumulate assets in checkable deposit accounts they may wish to seek alternatives with higher interest payouts.
Common alternatives include high interest checking accounts and money market accounts, both offered through personal banking services. Banks and other financial institutions may also offer special demand deposit accounts such as Super Now accounts or accounts that allow for negotiable drafts and negotiable order of withdrawals.
In the checkable deposit market, investors will find a few additional options paying varying interest rates for high maintenance accounts. Checking accounts paying interest of up to 4% can be found across the U.S. High-maintenance, high-interest checking accounts often have balance and transaction requirements.
Provident Bank offers one example of a high-interest checking account with demand deposits. The bank’s Provident Smart Checking Account pays 1.51% annual interest for balances up to $15,000. Investors meeting a few minimum monthly requirements, such as ten debit card transactions and one direct deposit, qualify for the bank’s high interest rate.
Money market accounts and funds are another option for investors seeking to accumulate wealth in liquid demand deposit accounts. Banks offer money market accounts with interest. Banks invest funds in short-term cash instruments which allows them to payout the interest to money market accounts. Money market accounts typically have a limited number of withdrawals due to the investments backing them. They are usually insured by the Federal Deposit Insurance Corporation.
U.S. Bank offers a variety of money market accounts including a money market account for retirement. Rates range from 0.04% to 0.10%.